In October 2017, a document was issued by the Bank of Lithuania stating its position regarding ICOs and cryptocurrencies. In the said document, the bank outlined a timeline of allowing digital currencies to be used for payments. Moreover, it also noted terms and conditions for financial market participants (FMP) to establish investment funds for investment in digital assets.
Nevertheless, in the recent document, the bank has not changed its underlying principles. It maintained that financial services activities of FMPs must be kept separate from those associated with cryptocurrencies. Moreover, FMPs should not get involved in crypto-related activities and should refrain from providing any crypto related services.
According to the new policy, FMP are not allowed to receive payments using digital assets; they can now employ third-party services. Only fiat currency can be utilized to make payments to FMP accounts.
The creation of financial funds including digital assets for industrial investors is now permitted, notes the new policy. Unless considered as securities, FMPs are prohibited to accept digital assets as collateral or issue digital assets loans. Furthermore, they are not allowed to accept cryptocurrencies with the obligation to repay them with or without interest.
In June 2018, Lithuania issued a comprehensive report stating new guidelines on ICOs. A wide range of regulatory topics was discussed in the said report including anti-money laundering, taxation and accounting.
During a seminar held by Lithuanian regulators in October 2018, it was noted that Lithuania is one of the world leaders (305% growth) in the crypto sector. Moreover, a high ICO turnover volume, EUR 500 million (USD 567 million), was recorded in the last 18 months. These results motivated Lithuanian authorities to come up with tougher anti-fraud mechanisms.
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